"This isn't going to be over in a year. Housing prices could be declining
for years and years." -- Robert Shiller, Yale University economics
professor.
"We don't think the market is in that bad of shape. It's just
not in as good shape as it was two years ago." -- John Karevoli, analyst at
DataQuick Information Systems.
Both gentlemen commented for an AP
story on the forecast for housing prices this spring. Shiller, as some may
recall, titled one of his books "Irrational Exuberance," borrowing from a term
used by former Fed Reserve Chairman Alan Greenspan in a speech in 1996 shortly
before stock markets around the world plunged.
"Nationally," the AP story
said, "19 major metropolitan markets face a greater than 50 percent chance of
housing price depreciation in the next two years, up from 11 markets a year
ago," according to PMI Mortgage Insurance Company, which publishes regular
predictions. As has been the case for some time now, California and
northeastern U.S. markets dominate the list, leading us once again to advise
that if you have your sites set on a home in the south and you are going to use
the value of your home in the northeast to pay for it, waiting for the markets
to snap back may be a fool's paradise. The gap in housing values north and
south continues to widen.
You can find a list of markets
ranked by risk at USA Today. No fooling.
